https://www.quibblo.com/story/DLEm-PVs/5-basics-to-know-before-you-invest-in-Gold-mutual-funds
Gold mutual funds involve direct or indirect investments in gold. It is a great way to invest in gold without purchasing it in its physical form.
Gold mutual funds involve direct or indirect investments in gold. It is a great way to invest in gold without purchasing it in its physical form. These are open-ended mutual funds investment, regulated by the gold Exchange Trade Fund. The value of this virtual gold is proportionate to the value of actual gold. The gold works as a safeguard during the financial crisis of an individual.
Purposes
People invest in Gold funds so that they can survive even if the market collapses. It is suggested that one should invest at least 10% to 20% in gold funds. The price of gold fluctuates a lot in the global market. A minimum hike in the price can be beneficial for the investor. The return on one's investment sometimes even outgrows the actual gold price. If one invests for a long-term gold plan, the return is calculated based on the current gold price in the global market. It provides a significant amount of money if the price of gold rises at the time of return.
Five Basic things about Gold Mutual funds
Before investing in Gold funds, one should understand the details about it. One must know how to invest in gold funds, how one can liquidate the amount, the tax benefits, the transaction process, and others.
Five major things about gold mutual funds are mentioned below:
1. Flexible
Gold mutual funds are very flexible. Unlike physical gold, one can invest even Rs 500 in their Gold mutual funds. So, it is great for people with low incomes who can only afford the minimum rate. Purchasing physical gold needs quite a large amount of money; that is why most of us do not invest in gold funds. But now, with Gold mutual funds, everyone can invest in gold and enjoy the benefits.
2. Easy liquidation
All of us face financial need at some point in our lives. During any financial need, gold funds help one a lot. We can liquidate the gold in short notice. One can opt for any redeemable amount from their gold fund to serve their financial requirements. Trading gold is also very simple and fast.
3. Safe investment
Gold funds are very safe investments. Security and Exchange Board of India monitors all the gold transactions and checks the condition of these funds periodically. Also, they are not physical gold, so storing them is quite simpler compared to real gold. There are no chances of theft or robbery as well.
4. Diversity
Mutual funds investment portfolio gains diversity when one invests in Gold funds. If we invest all our money in a particular thing, the risk of facing a substantial loss increases. That is why people invest in different schemes that lessens the risk of loss and maintain the diversity of their portfolio.
5. Tax benefits
Investing in long term gold funds can give various tax benefits to the individual as well. So, it will benefit greatly during filing returns.
Gold investments are always beneficial. It helps us during an economic crisis. Thus, more people are investing in gold after understanding its various benefits.
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